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Mortgage Rates This Week – December 16, 2013

What's Ahead For Mortgage Rates This Week - December 16 2013Mortgage Debt Rises For First Time Since Recession

Last week was relatively quiet concerning scheduled housing-related news, but the Federal Reserve’s financial accounts report, released on Monday, indicated that mortgage debt in the U.S. had increased for the first time since the first quarter (Q1) of 2008.

Mortgage debt increased by a seasonally-adjusted annual rate of $87.4 billion, or 0.90 percent. Mortgage debt remains approximately 12.00 percent below pre-recession levels.

Increasing debt is not often considered good news, but in the case of mortgage debt in today’s economy, it suggests economic recovery in the form of higher home prices and fewer foreclosures.

Another instance of counter-intuitive economic results was released Tuesday. The Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS) report for October.

JOLTS indicated that 2.39 million workers quit their jobs in October. This was the highest number of jobs quit since 2008. While this may appear counter-productive to a growing economy, it indicates that workers are leaving their jobs for better positions.

Mortgage Rates Fall, Federal Budget Deficit Shrinks

On Wednesday the U.S. Treasury announced that November’s federal budget deficit had shrunk to -$135 billion from November 2012’s deficit reading of -$172 billion. This represents a year-over-year deficit decrease of 21 percent.

Freddie Mac’s Primary Mortgage Market Survey (PMMS) report provided good news as average mortgage rates fell last week. The average rate for a 30-year fixed rate mortgage fell from 4.46 percent to 4.42 percent. Discount points rose from the previous week’s reading of 0.50 percent to 0.70 percent.

15-year fixed rate mortgage rates fell from 3.47 percent to an average reading of 3.43 percent, with discount points rising from the prior week’s reading of 0.40 percent to 0.70 percent.

The average rate for a 5/1 adjustable rate mortgage dropped from 2.99 percent to 2.94 percent with discount points unchanged at 0.40 percent.

Lower mortgage rates are good news for home buyers facing higher home prices.

Weekly jobless claims rose last week. The previous week’s reading of 300,000 new jobless claims was short-lived as the reading for new jobless claims rose to 368,000 last week and surpassed a consensus of 335,000 new jobless claims.

Financial analysts cautioned that employment data can be volatile during the holidays, and noted that the four-week average of new unemployment claims rose by 6000 to 328,750.

Whats Ahead

Mortgage rates in Seattle will be reacting to Washington and the Federal Reserve not the data this week. Wednesday brings the FOMC and their policy statement and interest rate decision. While there will be no change in the Fed Funds Rate, the focus on Bernanke’s last press conference will be on whether or not the Fed will begin a reduction in their bond buying program or some guidance on when the taper may begin.

Economic Reports

DateTime (ET)Economic ReleaseActualMarket ExpectsPrior
16-Dec8:30 AMEmpire Manufacturing5-2.2
16-Dec8:30 AMProductivity-Rev.2.70%1.90%
16-Dec8:30 AMUnit Labor Costs-1.30%-0.60%
16-Dec9:00 AMNet Long-Term TIC FlowsNA$25.5B
16-Dec9:15 AMCapacity UtilizationNA78.10%
16-Dec9:15 AMIndustrial Production0.40%-0.10%
16-Dec9:15 AMCapacity Utilization78.40%78.10%
17-Dec8:30 AMCPI0.10%-0.10%
17-Dec8:30 AMCore CPI0.10%0.10%
17-Dec8:30 AMCurrent Account Balance-$101.0B-$98.9B
17-Dec10:00 AMNAHB Housing Market Index5554
18-Dec7:00 AMMBA Mortgage IndexNA1.00%
18-Dec8:30 AMHousing Starts915K891K
18-Dec8:30 AMHousing Starts920KNA
18-Dec8:30 AMHousing Starts950KNA
18-Dec8:30 AMBuilding Permits983K1034K
18-Dec10:30 AMCrude InventoriesNA-10.585M
18-Dec2:00 PMFOMC Rate Decision0.25%0.25%
19-Dec8:30 AMContinuing ClaimsNANA
19-Dec8:30 AMInitial Claims333K368K
19-Dec8:30 AMContinuing Claims2760K2791K
19-Dec10:00 AMExisting Home Sales5.00M5.12M
19-Dec10:00 AMPhiladelphia Fed56.5
19-Dec10:00 AMLeading Indicators0.60%0.20%
19-Dec10:30 AMNatural Gas InventoriesNA-81 bcf
20-Dec8:30 AMGDP – Third Estimate3.60%3.60%
20-Dec8:30 AMGDP Deflator – Third Estimate2.00%2.00%

To see our last “This Week’s Mortgage Rates” post and check out the current trends click here. For more news on Washington state mortgage rates and national rates check out our Market News page!

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